The Psychology of Horror Games and Film

A nice little article from Gamepro:

"And games do have other strengths. That same sense of control can create empathy for the characters in a game, and this kind of empathy has been found to make fans of fear freak out all the more severely. When you choose a character's actions or even appearance, you begin to identify more with them. "The fright reactions that teens and adults experience typically spring from an empathetic relationship with the character [or] victim," Weaver says. "If viewers can put themselves in the shoes of a character who is afraid, they are more likely to experience that fear, too."